In energy distribution. Decentralized energy, as the name suggests,

In the last years, the electric power industry is evolving at a fast pace where new challenges
are faced. The grid needs to be adapted in order to be a more stable and dynamic network
because of the increasing demand for energy, the altering peak hours and the volatile changes.
Many of these challenges not only influence the structure of the grid by adding new types of
components, e.g. renewable energies, but also shift the entire way, how electricity is consumed.
As S. Blumsack 4 explains in his work, this shift cuts across many core aspects of the electricity
consumption such as its generation, distribution and utilization. The generation of electricity is
no longer made exclusively by fossil fuels, new sources are introduced such as the renewable
energies. The distribution is no longer solely centralized but is changing to a more decentral-
ized way of energy distribution. Decentralized energy, as the name suggests, is produced close
to where it will be used, rather than at a large plant elsewhere and sent through the local or
nearby grid. Finally, the utilization of the energy behaves more dynamically and volatile than

In the year 2007, the concept of Smart Grid (SG) was officially introduced by the Energy In-
dependence and Security Art (EISA) 15 and approved by the US Congress in the same year.
In spite of notion already applied since the 1980’s by developed countries like the US with the
introduction of the automatic meter reading 5. The concept of SG was introduced as a re-
sponse to the problems and challenges of the recent development of the grid. In addition to the
challenges mentioned above, the high level of energy demand at different hours was and it still
being a common issue. As the survey 6 shows, the consumption of energy is increasing every
year thanks to the more energy-requesting equipments and electronic appliances. This growth
of energy demand brings further issues, such as the need of a secure and reliable network. This
means that the network will ensure more reliable supply of electricity as well as its distribution,
and reduced vulnerability to energy cuts of different forms, e.g. natural disasters and attacks.
Furthermore, the urgency of a structured network is visible. The new topology of the grid should
be able to deal with large number of smaller subnetworks without being a centralized grid and
a bidirectional energy flows.

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Although, SG is a term that does not have a unique definition, the description presented by the
IEEE 23 is very interesting. They described the SG as “the integration of power sources, com-
munications, and information technologies”. One of the core ideas of the SG is the distributed
sources of energy. This idea addresses one central issue presented before, the decentralized
energy. With the introduction of renewable energy sources (solar, wind, geothermal, etc.), this
issue has been sharpened. Nowadays, the energy production takes place in numerous locations
and in diverse scale, from the private user to industrial installations. SG tries to solve this issue
through new concepts and technologies such as the Distributed Energy Resources (DER) 3